A 30% rally in bitcoin in less than a month has bulls eyeing $10,000 and beyond

Secondary price target is the May highs just shy of $10,000, says technical analyst

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By

AaronHankin

Reporter

Cryptocurrency evangelists are coming out of the woodwork as the world’s most prominent digital currency enjoys a sudden change in fortune.

In less than a month, bitcoin
BTCUSD, +0.51%
has roared back, rising more than 30% since June 24, highlighted by Tuesday’s 10% rally that saw bitcoin break a number of psychological and technical levels closely monitored by traders.

Although bitcoin remains more than 50% off its all-time high, the tide is turning, both in the price and in overall sentiment. “A series of higher highs and higher lows are now in place for the first time since the May highs and cryptocurrencies are beginning to respond positively to positive news,” wrote Rob Sluymer, technical strategist at Fundstrat Global Advisors, in a Wednesday research note.

The near-term target for Sluymer is the 50% retracement of the May-June correction ($7,861) with the secondary target being the May highs, just shy of $10,000. The technician said the May highs would bring “formidable resistance,” with light pullbacks likely.

Sluymer’s colleague Tom Lee, who is one of the staunchest bitcoin bulls, told CNBC on Tuesday that buying bitcoin when it is 30% below its 200-day moving average, a closely watched momentum indicator, would have a six-month profitability return of “close to 100%.”

On the fundamental side, Tim Enneking, founder and managing director of Crypto Asset Management said that the regulatory environment is becoming more advantageous, which is aiding the rally.

“During the nuclear winter we saw in January and February, the biggest issues were regulatory, and what’s happened over the last two to three months is the drumbeat of negative news has changed. For every jurisdiction that’s being harsh, there’s another giving favorable signals,” said Enneking.

Views inside his West Coast-based crypto firm are divided, but for Enneking, what the recent rally has done has established the $6,000 area as the bottom, a sentiment shared by cryptocurrency pioneer, Barry Silbert.

However, for those looking for value in one of the other 1,500 or so digital currencies other than bitcoin, Silbert said investors should tread with caution because he believes 99% of coins are going to zero.

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